Harriet Harman was branded a "disgrace" as she faced an open rebellion of Labour backbenchers over her comments that the former MP Phil Woolas had no future in the party, it emerged tonight.

At a meeting of Labour MPs in parliament last night, Harman was the target of colleagues upset by her remarks. A specially convened election court ruled last week that Woolas lied to win his Oldham East and Saddleworth seat in May by 103 votes, exploiting racial tensions in order to defeat Liberal Democrat Elwyn Watkins.

Woolas was stripped of his seat and banned from standing for election for three years, in the first such judgment for 99 years. He pledged to fight to overturn the judgment and has opened a bank account to raise funds for an appeal. He has to raise £50,000 by the end of the week.

He is also in the middle of a Labour party disciplinary process.

At the weekend Harman said that even if the former immigration minister were to win an appeal he would still be unwelcome in the party. The Labour party high command believe they have public opinion on their side after a Yougov poll showed 71% of respondents felt the courts were right to rule against Woolas and only 7% thought the courts had made the wrong decision.

But a sizeable portion of the Labour party feel Woolas should have received the benefit of party support until the results of both processes were in.

A letter being circulated to raise money points to the legal opinion Woolas has received, including from former cabinet minister Charlie Falconer, that "winning the judicial review would also clear Phil's name of the allegations of deception as well as overturning the point of law. We have strong QC opinion that we can win this case; Lord Falconer has also given his opinion that the law was not properly applied and that winning does indeed clear Phil's name."

Woolas says his supporters and financial backers include Gordon Brown and Cherie Blair. One MP is said to have called Harman's comments "a disgrace" at Monday's meeting. Graham Stringer, MP for Manchester Blackley, said: "The feelings in the parliamentary Labour party were very strong."

Another MP, who did not want to be named, said the attack on Harman was "unbelievable". One MP said: "They were saying that Woolas should have been supported, that he should never have been suspended and that the party should be paying for his legal expenses."

Michael Connarty, Labour MP for Linlithgow, told Sky News he believed Harman had spoken out in the way she did for the "titillation of the tabloid [press]" and at the meeting said he had asked her to "examine her conscience". "The leadership have been too swift to demand another hanging," he told Radio 4.

Earlier David Watts, MP for St Helens North, told BBC Radio 4's The World at One: "There is a concern within the parliamentary Labour party, first of all that courts are getting involved in such practices. And if there's going to be action taken against any individual, we have a procedure in place to deal with that, and that means the member concerned will be suspended whilst an investigation takes place."

Labour MP for Walsall North David Winnick said: "It's not acceptable to most of us to say that Phil's time in the Labour party is finished forever. We simply don't see it in that way. We see a colleague who fought a very, very tight marginal, he may have gone over the top, but that's no reason to say his political career is over for good."

Harman has been the public face of Labour's response to the ruling, with Ed Miliband on a fortnight's paternity leave. In private, the leadership's position enjoys fairly wide support in the shadow cabinet, though some senior members agree Harman was wrong to pre-empt the appeal.

The case has attracted concern across the house regarding the possible precedent set with a court overturning the result of an electorate. Labour has denied it has already sent people to the seat to canvas for a suitable candidate.